Donor Education and Philanthropic Advisors and
Making annual donations to local museums or an animal
shelter calls for different knowledge and a different level of intensity than
backing, and quarterbacking, an initiative to eliminate homelessness in the
city. Therefore, a major factor in choosing structure for your philanthropy is
the nature of the advice, support, and technical assistance you will need to
carry out your objectives. In short, you have a choice between “renting”
advisors by retaining consultants or “buying” them by hiring staff.
We mention three categories of external support:
learning how to practice philanthropy
strategic planning and evaluation
information about potential grantees
Learning how to practice philanthropy: donor education
programs. Among the programs designed to
help individual donors learn about philanthropy, here are two with which we are
Workshop West (TPW West) provides a year-long intensive training
program to a select cadre of donors from the West Coast who are seriously
committed to becoming more effective, strategic, and global in their
philanthropy. Its goal is “to create an active global association
of strategic philanthropists with the skills, commitment and imagination
to make a significant contribution to the pressing issues of the day.” Participants in the TPW West program have the opportunity to create
lasting relationships with political leaders, leaders in the non-profit
sector and the foundation world, and other active philanthropists.
The The Global Philanthropy
Circle, Global Philanthropy Circle (www.synergos.org/philanthropistscircle),
run by the Synergos Institute, brings together individuals and family
philanthropies from many countries who share a concern for reducing global
poverty. It provides workshops on strategy and evaluation and
opportunities for peer learning as well as international trips to
developing countries to meet with leaders of civic society, business, and
Advisory services. In Donor Advisors and Philanthropic Strategy, Thomas Backer and Lili Friedland describe
the various services provided by philanthropic advisors and the questions they
Financial assessment - Do I
have the financial resources to be philanthropic?
Values clarification - What
deeply-held values guide my philanthropic desires?
Family involvement - To what
extent should my other family members be involved?
Selection - What philanthropic
instrument(s) fit my tax, financial, legal and philanthropic
Structure - How will the
philanthropic instruments I choose be created?
Actions - What grants will be
made or other actions taken to fulfill my plans?
Learning and peer networking -
What opportunities are there for me to learn more about philanthropy,
either from direct experience or from contacts with peers?
Collaboration - What
opportunities are there for me to collaborate with other donors or
Evaluation - How will I get
input to improve my philanthropic strategy and measure progress towards my
Assistance in setting up foundations or other structures and
engaging in philanthropy—from strategic planning through grantmaking and
evaluation—are provided by individual consultants, firms, and banks.Rockefeller Philanthropic Advisors,
Arabella Philanthropy, and The Philanthropic Initiative are examples of
comprehensive philanthropic advisory services. These
firms help donors identify goals, provide research and counsel on charitable
giving and best practices, develop philanthropy programs, and offer
administrative and management services for foundations and trusts, each
tailored specifically to each client’s level of philanthropic involvement and
goals. For clients who wish to start a foundation, for example, Rockefeller Philanthropic Advisers provides planning services ranging from analyzing a
donor’s values and vision to develop a mission statement to advising on by-laws
and governance to developing management systems.
number of advisors serve philanthropists with particular needs. For example, Calvin Edwards & Co. works with donors to faith-based charities, helping donors find organizations
and ministries that share their values and maximizing the good they do through
In addition to
firms of this sort, an increasing number of banks, including JP Morgan,
Citigroup, Wells Fargo, Bank of America, UBS and Deutsche Bank, provide high
wealth clients with similar kinds of philanthropic services.
Philanthropy-focused programs like UBS’s Philanthropy Services and Deutsche
Bank’s Wealth with Responsibility advise clients on creating socially
responsible investment portfolios, help clients set up new foundations, and
assist clients in bequeathing philanthropic capital and enterprises to the next
generation. For example, Wells Fargo’s Charitable
Management Group offers foundation development, grant administration
services, scholarship program administration, investment management and
consulting services, foundation administration, and fax services.
philanthropic advisors can provide knowledge and expertise that it could take
you years to acquire. For small, unstaffed family foundations, philanthropic
advisors can do much of the work that a staff might do. And even large, staffed
foundations make use of philanthropic advisors to supplement their own staff’s
expertise. However, as Lucy Bernholz notes:
The legal, accounting, and
investment services provided to philanthropy are part of well-monitored
industries and operating under the professional standards and guidelines of
those fields. The program advisory piece, however, stands out as a separate
entity. There are no standards of practice, no recognizable professional or
credentialing requirements, no oversight bodies (self-maintained or otherwise),
and no common definition of what the product line is. Elements of those
advisory services include mission setting, strategic planning, grants
management, due diligence, issue research, evaluation, and technical
Strategic Planning and Evaluation.In addition to some of those mentioned
above, a number of consulting firms assist foundations in designing and evaluating strategies. These include the nonprofit arm of
McKinsey & Co. http://www.mckinsey.com/clientservice/nonprofit/), The Bridgespan
Group (a nonprofit spinoff of Bain & Co., www.bridgespan.org), the Redstone
Strategy Group (www.redstonestrategy.com), FSG Social Impact Advisors (www.fsg-impact.org), Blueprint R&D (www.blueprintrd.com), and BTW – Informing Change
(www.informingchange.com). The Center for Effective Philanthropy (CEP) provides executives and trustees the management and governance tools
needed to define, assess, and improve overall foundation performance, with a
belief that improved performance of funders, and in particular foundations, can
have a profoundly positive impact on nonprofit organizations and those they
Information about potential grantees
Donors have access to web-based information about the
governance and performance of potential grantees:
DonorEdge, created by the Greater
Kansas City Community Foundation, provides donors to community foundations with access to extensive information
about more than 650 local nonprofit organizations and allows visitors to
quickly donate to any of the organizations listed. The model is now being
used by the Greater Houston Community Foundation, The Community Foundation
of Middle Tennessee, Denver’s Community First Foundation, Harrisburg,
Pennsylvania’s The Foundation for Enhancing Communities, and is under development
at The Columbus Foundation.
GuideStar contains extensive financial
information about more than 850,000 nonprofit organizations. GuideStar is
gradually adding information about organizations’ strategies and goals—though
it still has a long way to go in providing prospective donors with the
ability to compare charities and monitor their performance.
do not include websites that only provide information about an organization’s
finances. Unless it is combined with information about an organization’s
outcomes and impact, or at least good proxies for them, financial data can provide
a misleading picture of an organization’s performance. Financial ratings in
isolation erroneously imply that a donor can assess an organization’s
administrative costs in isolation from its effectiveness. This is the
equivalent of looking at only one side of a corporation’s financial statements.
No less than in the private sector, a nonprofit organization should seek not to
minimize but to optimize its costs so as to contribute net value to its
mission. An organization may have low administrative costs and produce little
of value. Indeed, some organizations with low costs may be under-investing in
back-office functions that not only serve their goals but provide public
accountability. In the business sector, low investment ratios at certain stages
of an organization’s development would make investors nervous, not excited.
A number of membership organizations serve foundations
through regular meetings and publications.
The Association of Small Foundations is a membership organization comprised of 3,000 of these foundations
– with asset sizes that range from the thousands to the tens of
millions – that have few or no staff members. It hosts educational
programs and publish resources that help these small foundations learn how
to operate and how to succeed.
The Council on Foundations is a membership
association of more than 2,1000 grantmaking foundations and corporations
that provides its members with technical assistance, research,
publications, conferences and workshops, legal services, and a wide array
of other services.
Grantmakers for Effective Organizations (GEO) is dedicated to promoting learning and encouraging dialogue among
funders committed to building strong and effective nonprofit
organizations. GEO achieves this mission by commissioning and contributing
to research, developing programs and products for its members, and
building a community of practice that expands the resources available on
Philanthropy Roundtable is a national association of individual donors, foundation trustees and
staff, with a generally conservative approach. Their mission is to foster
excellence in philanthropy, protect philanthropic freedom, assist donors
in achieving their philanthropic intent, and to help donors advance
liberty, opportunity, and personal responsibility in America and
The Foundation Center maintains
a comprehensive database on funders and their grants and operates
research, education, and training programs to advance philanthropy.
Independent Sector is a membership organization of charities, foundations,
and corporate giving programs that supports both the independence of the
nonprofit sector and its accountability.
In addition, foundations may belong to “affinity groups” of
grantmakers with common interests, who share knowledge and engage in
collaborative funding and gossip. Affinity groups may be formed around
particular areas of grantmaking, strategic functions, or identity.For example:
Grantmakers in the Arts (www.giarts.org), works to strengthen the field of
private sector arts grantmaking by hosting an annual conference and other
events, running a major periodical, conducting research, and providing
communication services. It seeks to increase arts philanthropy and to support
individual arts grantmakers in meeting their objectives. GIA represents over
Grantmakers for Education (www.edfunders.org), seeks to advance
effectiveness in education grantmaking, with the goal of improving educational
outcomes for all students. It facilitates sharing best practices, encourages
networking and collaboration among its members, provides workshops and
programs, and helps grantmakers improve their strategies for achieving results
Network for Smart Growth and Livable Communities (www.fundersnetwork.org)
brings together funders, nonprofit organizations and other partners to address communities'
environmental, social, and economic problems, The Network was formed in October
1999 by twenty foundations and became an independent nonprofit organization in
Youth Transitions Funders Group (www.ytfg.org) focuses on helping
disconnected youth from ages 14 to 25 make a successful transition into
adulthood. Its members are concerned with foster care, juvenile justice, and
The Communications Network (www.comnetwork.org) is a
function-focused affinity group that promotes communications as an integral
component of strategic grantmaking. The Network provides services to expand the
capacity of grantmakers to communicate more effectively.
Hispanics in Philanthropy (HIP; www.hiponline.org) is a
population-focused affinity group, working with funders to strengthen Latino
communities and leadership, and to provide a network for Latino grantmakers.
HIP's Funders' Collaborative for Strong Latino Communities project has raised nearly $35 million and has made
grants to 427 Latino-led nonprofits across the Americas. HIP sponsors regional,
national and international conferences and briefings, research and
publications, and professional development programs; it also provides referrals
for foundations seeking Latino staff and trustees.
 The Philanthropy Workshop West, http://www.tpwwest.org.